scholarly journals Subjective Risk Tolerance of South African Investors

2018 ◽  
Vol 10 (6) ◽  
pp. 286
Author(s):  
Zandri Dickason-Koekemoer ◽  
Suné Ferreira
Keyword(s):  
South African ◽  
Financial Risk ◽  
Significant Contribution ◽  
Demographic Factors ◽  
Risk Tolerance ◽  
Multinomial Regression ◽  
Subjective Risk ◽  
Two Factors ◽  
Married Individuals ◽  
Determining Factor

In general, the amount of risk an individual is willing to tolerate can be influenced by demographic factors. However, needs for research arise as to whether demographic factors influence the amount of risk investors in South Africa are willing to tolerate. The survey was conducted in 2017 and all South African investors were included in the sample frame. For this study, a sample of 800 was collected and used. Multinomial regression was used to indicate whether there were more than two factors that can influence the four risk tolerance levels of South African investors. The study suggested that gender is a determining factor in the risk tolerance of individuals. African investors were more likely to take the substantial financial risk. Age was also a determining factor of risk tolerance which follows the assumptions of the investor lifecycle where younger investors are more risk tolerant. The study furthermore found that higher annual income attracts more risk-taking while lower-income attracts more risk averseness in individuals. It was lastly observed that married individuals and those that are no longer married will be more likely to be risk-averse. This study makes a significant contribution in profiling investors risk tolerance according to their demographic factors whereby financial institutions can offer more tailored investment options.

scholarly journals Subjective Risk Tolerance of South African Investors

2018 ◽  
Vol 10 (6(J)) ◽  
pp. 286-294
Author(s):  
Zandri Dickason-Koekemoer ◽  
Suné Ferreira
Keyword(s):  
South African ◽  
Financial Risk ◽  
Significant Contribution ◽  
Demographic Factors ◽  
Risk Tolerance ◽  
Multinomial Regression ◽  
Subjective Risk ◽  
Two Factors ◽  
Married Individuals ◽  
Determining Factor

In general, the amount of risk an individual is willing to tolerate can be influenced by demographic factors. However, needs for research arise as to whether demographic factors influence the amount of risk investors in South Africa are willing to tolerate. The survey was conducted in 2017 and all South African investors were included in the sample frame. For this study, a sample of 800 was collected and used. Multinomial regression was used to indicate whether there were more than two factors that can influence the four risk tolerance levels of South African investors. The study suggested that gender is a determining factor in the risk tolerance of individuals. African investors were more likely to take the substantial financial risk. Age was also a determining factor of risk tolerance which follows the assumptions of the investor lifecycle where younger investors are more risk tolerant. The study furthermore found that higher annual income attracts more risk-taking while lower-income attracts more risk averseness in individuals. It was lastly observed that married individuals and those that are no longer married will be more likely to be risk-averse. This study makes a significant contribution in profiling investors risk tolerance according to their demographic factors whereby financial institutions can offer more tailored investment options.

scholarly journals Determinants of Financial and Non-Financial Risk Tolerance among Students at Selected South African Universities

2018 ◽  
Vol 10 (1) ◽  
pp. 293-302
Author(s):  
Pfano Michael Ramudzuli ◽  
Paul-Francois Muzindutsi
Keyword(s):  
South African ◽  
Significant Influence ◽  
Financial Risk ◽  
Demographic Factors ◽  
Binary Logistic Regression ◽  
Risk Tolerance ◽  
Financial Risks ◽  
Allocation Process ◽  
South African Universities ◽  
Financial Risk Tolerance

Abstract To enhance the portfolio allocation process, individuals need to understand their financial ability and psychological willingness to tolerate risks. To do this, their risk tolerance level must be quantified. This study used a survey questionnaire to collect data from 470 students at selected South African universities, and a binary logistic regression to test the effect of demographic factors on financial risk tolerance versus non-financial risk tolerance. Our findings suggest that the level of risk tolerance cannot be generalized across different risk domains. We also found that demographic factors affect the two domains of risk tolerance differently. Specifically, age did not have a significant influence on financial risk tolerance, while it significantly increased non-financial risk tolerance. Similarly, gender did not have any significant influence on non-financial risk tolerance, while it positively affect-ed financial risk tolerance. Furthermore, students in the fields of the humanities, engineering and IT showed a strong appetite for non-financial risks, but students in the commerce faculty preferred financial risks.

scholarly journals AN EMPIRICAL ANALYSIS OF FINANCIAL RISK TOLERANCE AND DEMOGRAPHIC FACTORS OF BUSINESS GRADUATES IN PAKISTAN

2020 ◽  
Vol 10 (4) ◽  
pp. 220-234
Author(s):  
Naveed Hussain Shah ◽  
Waqar Khalid ◽  
Saifullah Khan ◽  
Muhammad Arif ◽  
Muhammad Asad Khan
Keyword(s):  
Empirical Analysis ◽  
Financial Risk ◽  
Demographic Factors ◽  
Risk Tolerance ◽  
Business Graduates ◽  
Financial Risk Tolerance

Impact of Risk Tolerance and Demographic Factors on Financial Investment Decision

GIS Business ◽  
2018 ◽  
Vol 13 (5) ◽  
pp. 31-40
Author(s):  
Mitali Baruah ◽  
Abhishek Kirit kumar Parikh
Keyword(s):  
Financial Risk ◽  
Investment Decision ◽  
Demographic Factors ◽  
Demographic Variables ◽  
Risk Tolerance ◽  
Extensive Literature ◽  
Financial Investment ◽  
Financial Decisions ◽  
The Impact ◽  
Financial Risk Tolerance

Risk tolerance is popularly used in the personal financial planning industry to understand an investor’s attitude towards risk. In the twenty-first century, it is very important for the various investment firms, fund managers, financial planners to understand financial investment decisions of an investor for developing a strategy for the sale of their investment products in market. However, financial decisions of an individual not only depend on financial risk-tolerance level, but also upon different demographic factors. Thus, this study is undertaken to develop a model that helps in understanding impact of risk tolerance and demographic factors jointly on investment decision, especially, a decision related to level of investment. Also, investor may be having higher risk tolerance for the calculative investment but may be having lover risk tolerance in speculative investment. So, based on extensive literature support, this research has tried to propose a model for understanding the impact of investment risk tolerance, capital risk tolerance, speculative risk tolerance, and six important demographic variables jointly on investment decision. Thus, this study would be helpful to investment firms in understanding impact of risk tolerances and demographic variables jointly on level of investment of investors, which can be used for designing a strategy or investment product to offer to the investors with different levels of financial risk tolerance and different demographic profiles.

scholarly journals The effect of age and gender on financial risk tolerance of South African investors

2018 ◽  
Vol 15 (2) ◽  
pp. 96-103 ◽  
Author(s):  
Zandri Dickason ◽  
Sune J. Ferreira
Keyword(s):  
South African ◽  
Financial Risk ◽  
Risk Tolerance ◽  
Financial Decisions ◽  
Investment Companies ◽  
Risk Profiling ◽  
Gender And Age ◽  
And Gender ◽  
Financial Risk Tolerance ◽  
Effect Of Age

Financial risk tolerance refers to the amount of risk a person is willing to take when making financial decisions. Previous researchers have found that demographic factors when used as independent variables to have an effect on the risk tolerance behavior of investors. Within this study, emphasis was given to gender and age within a sample of South African investors. Not much research on risk tolerance and demographics has been done in South Africa. Hence, an opportunity for further research within this field emerged. This study aimed to contribute towards the accurate risk profiling of South African investors based on their level of risk tolerance considering their gender and age. This study can be used as a future forecasting tool for investment companies to predict risk tolerance levels based on gender and age levels. Results from this study correspond to previous studies where male investors are more risk tolerant than female investors. A statistical difference was also found between male and female investors within the age categories of 35-49 years and investors older than 50 years. All age categories were found to be more risk tolerant for investors older than 50 years based on the binary regression.

scholarly journals Financial knowledge and subjective financial risk tolerance among students at a South African University

2015 ◽  
Vol 5 (3) ◽  
pp. 180-185 ◽  
Author(s):  
Pfano Michael Ramudzuli ◽  
Paul-Francois Muzindutsi
Keyword(s):  
South African ◽  
Financial Risk ◽  
Binary Logistic Regression ◽  
Demographic Variables ◽  
Risk Tolerance ◽  
Financial Knowledge ◽  
Binary Logistic Regression Model ◽  
Gauteng Province ◽  
Number Of Factors ◽  
Financial Risk Tolerance

This study used a self-administered questionnaire to determine the effect of financial knowledge and other demographic variables on Financial Risk Tolerance (FRT) among South African University students. Descriptive statistics and a binary logistic regression model were used to analyse information from 330 participants selected from a South African University in the Gauteng province. The results indicated that the probability of being risk tolerant was high among students with financial knowledge compared to those without financial knowledge. Among demographic variables, monthly expenditure and religion were found to have a significant effect on Financial Risk Tolerance. The results of the study thus draw attention to a number of factors that can help investment managers in finding suitable financial products for their clientele

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